The big-cap biotech sector saw a surge in short interest during the second half of August. Short interest is generally taken as an indicator of a stock’s future performance. If short interest is up, chances are that share price will go down. Much of this sentiment in the biotech sector was driven by a market sell-off created by deteriorating performance of the Chinese economy. The equity market crash in China and rest of the Asian economies spilled over to the global stock market. Investors have little to worry from the latest short interest trend in the biotech industry; it seems temporary.
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